HSBC, Lloyds, Barclays, Royal Bank of Scotland and Standard Chartered will implement G20 pledges on financial sector pay, the British government said yesterday.
The banks have committed to take on Financial Services Authority (FSA) rules on remuneration which are broadly in line with the G20 approach and will be updated next year to close any gaps, the Treasury said.
“They are committed to implementing important enhancements in disclosure, deferral and clawback with effect from 1 January 2010 for performance year 2009,” the Treasury said in a statement.
Finance minister Alistair Darling, who met with the banks yesterday morning, will write to other countries to urge them to negotiate similar arrangements, a government source said. Britain is also planning to reach similar agreements with other UK and international banks.
Excessive bonuses and rewards in the banking sector have been blamed as a key cause of the financial crisis as bankers were encouraged to take on too much risk.
However, countries have been reluctant to clamp down on pay too soon without international agreement and action because of fears that bankers seeking big money would just move to areas with slacker rules and persist with risky behaviour.
“In a competitive and international business it is right to make sure that our staff are appropriately and competitively rewarded for sustainable, long-term performance,” the five banks said in a statement.
“We therefore welcome the G20 remuneration reforms and their global nature, as it is essential that banking reward is consistent with effective risk management and that there is parity both nationally and internationally on these issues.”